AI-Faked Video of Eastroc Founder Triggers Selloff; Creator Detained

Police in southern China have detained a man for allegedly using artificial intelligence to fabricate a viral video that falsely showed the founder of energy drink maker Eastroc Beverage refusing to drink his own product – a hoax that rattled investors before the company's shares rebounded.

Shenzhen's Nanshan district police said on Monday that a 39-year-old man surnamed Luo, who works in self-media, had been placed under criminal detention. He is alleged to have fabricated and spread the false information using AI tools to draw online traffic and turn a profit, police said, adding that the investigation is continuing.

The roughly 15-second clip, which began circulating in late June, purported to show someone at a banquet handing founder Lin Muqin a bottle of Eastroc's flagship energy drink. The figure waves it away, saying he does not usually drink it and prefers something else. The footage spread quickly on Chinese social media, drawing criticism from consumers and investors who questioned why a company's founder would refuse his own products, with some linking the clip to a slide in Eastroc's share price.

Eastroc reported the matter to police after issuing a statement on June 27 calling the banquet video entirely fabricated, with staged scenarios and invented dialogue and no factual basis. The company said the false information misled consumers and investors and damaged its reputation.

The man shown in the clip was not Lin Muqin, Eastroc said. The footage appears to stem from an April event tied to the company's sponsorship of Chinese motorcycle brand ZXMOTO. ZXMOTO founder Zhang Xue also posted a video debunking the rumor, saying the original exchange involved him offering an Eastroc drink to Jiang Weiwei, an Eastroc director and co-president.

Eastroc's shares had fallen sharply this year, roughly halving since January amid concerns about its reliance on its flagship energy drink and slowing growth in newer categories. The rumor added to the pressure, with the company's combined Shanghai- and Hong Kong-listed market value dropping more than 7 billion yuan (US$970 million) in the week before the police statement. After Monday's announcement, the stock rebounded: its Shanghai-listed A-shares hit the 10 percent daily limit, while its Hong Kong shares rose 7.38 percent.

Eastroc has led China's energy drink market for four straight years, with its share rising from 15 percent in 2021 to 26.3 percent in 2024, according to Frost & Sullivan data cited in its prospectus. By sales volume, its share reached about 40 percent in 2024. The company listed in Shanghai in 2021 and in Hong Kong in February 2026.